India has its own version of the “China shock”. Instead of exporting high volumes of competitive manufacturing goods across the globe, the world’s most populous nation sends millions of workers abroad. India churns out roughly 5 million graduates each year and around 1million people enter its workforce every month. But India’s economy cannot produce enough suitable jobs to employ its expanding labour supply. Youth underemployment is rife, despite the country’s sceptical rapid growth rate.
The country is the world’s largest source of international migrants, with an estimated 18.5 million living abroad in 2024. The Anglosphere and United Arab Emirates are common destinations. Indeed, over the past decade, Indian nationals have accounted for the vast majority of approved H-1B petitions, a US visa for global professionals in selected fields. In the UK, about 1 million Indian nationals arrived between 2021 and 2025. Meanwhile, last year Indians overtook the English for the first time to become Australia’s largest overseas-born group.
Under Prime Minister Narendra Modi, the country has positioned its large labour force — which includes the world’s second-biggest pool of science, technology, engineering and mathematics (Stem) graduates — as an answer to skills shortages and ageing demographics abroad. S Jaishankar, India’s foreign minister, recently said the country had signed labour-mobility pacts with 26 countries, with more in the pipeline. Such arrangements have been a central pillar of India’s bilateral trade negotiations. An overseas mobility bill also aims to help Indians access the “global workplace”.
Crucially, overseas markets provide a release valve. The export of workers enables the Indian government to ease socio-economic strains at home, where frustration abounds over the lack of good job opportunities. Many Indians end up settling abroad. And India is experiencing a worldwide backlash against its human exports.
Scepticism about immigration continues to animate politics in the rich world. And the recent surge in arrivals from the subcontinent, who join historical waves of emigration, puts a growing spotlight on people of Indian origin abroad. And Indian nationals’ family members and less-skilled individuals have emigrated too, in some cases by abusing the rules. This all provides fuel for anti-immigrant narratives.
Indeed, anti-Indian sentiment is on the rise. Just this month, the Republican nominee for a seat on Texas’s oil and gas regulator sparked allegations of racism for a social media post aimed at South Asian students. Last year, Indian-origin migrants were explicitly targeted in “March for Australia” rallies. Anti-South Asian slurs in online spaces in the US have also surged. The backlash could hinder the Modi government’s strategy. India cannot rely on remittances and its diaspora alone. The worker-export model reflects a deeper challenge facing New Delhi, which must strive to create enough productive work to better harness the country’s demographic dividend. India lacks jobs and it cannot export its way out of domestic problems.
Anonymous
2 comments:
Now, 'one anonay' is quarrelling with another 'anonay' over high-speed rail construction. Japan is blaming India for the slow progress of its high-speed rail construction over land acquisition, relocation of people and lack of commitment among other problems. Delay means cost escalation and that may result in payment issues for Japan.
India had proposed wanting HSR since talking about it in 1980, with the go-ahead in 2014, after more than thirty years of deliberation. More than 20 years passed and India's HSR is expected only to be functional by 2027 or 2028. Not the whole line, but only certain sections. In China, a decade would have seen tens of thousands of miles of HSR being constructed.
China was very fortunate to have failed to do the HSR construction for India, which was given to Japan. China realized early the problems regarding land acquisition in India that takes decades to resolve. It was a blessing in disguise for China not to be doing the construction and getting mired in problems that Japan is facing.
If I may say it out loud, even if China had been given the construction, it will face problems of payment when completed. India will come up with attempts to cut construction cost or delaying payments. That is the Indian modus operandi. Moreover, the other fear for China is that India may try to claim compensation for minor issues that may arise, tarnishing the image of Chinese technology.
Therefore, it is in China's best interest to avoid anything to do with India, be it investing or doing infrastructure development. Nothing good will come out of them.
Let just see how the rest of the world look at the problem of India exporting workers to other countries. Sindiapore has a problem over this for years, so does the rest of the world today.
When China and India took off three or four decades ago, China betted on becoming a manufacturing hub while India betted on being the services backroom of Western companies. Who betted on the right horse and who did not is clearly evident.
China's manufacturing depended on its own skilled workforce and is held hostage by nobody. China revamped its education system decades ago to fit in with its manufacturing agenda. It worked. The world still needs manufactured products that had held true in the past, at present and into the future. No one is foolish enough to want to compete with China, except, ironically, India.
India betted on the service industry, providing call centers en masse for Western companies and even tailored its education system for that. AI just ended all that and the service industry of India is collapsing. India has no way to migrate its service industry quickly to manufacturing. It did not have the investments, the skilled workers, the education system ready to turn around to take on the task. Coupled with that, the Middle East war is forcing Indians to return home to compete domestically in its job market. That is a serious problem compounded by the influx of more than five million university graduates joining the job market every year.
Now outsourcing labor to other countries is facing pushback, not just in Asia, but in Europe and America as well.
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